Friday, August 21, 2009

Corus to reopen South Wales plant to meet demand

Tata Steel-owned Corus Group plans to reopen its Llanwern hot-rolled strip plant in South Wales temporarily to meet fresh demand.

This 3-million-tonne annual capacity plant was mothballed in January this year, resulting in 528 job losses.

However, according to sources, the temporary re-opening of the plant next month will not result in any reinstatement of lost jobs.

Instead, the company plans to deploy workers from its existing plants to run this plant on a temporary basis. In January 2009, when the plant was closed, it was left with 850 workers after the job losses.

“This is not a full-fledged steel plant and it can be started and closed based on demand,” an industry source said. This plant in Llanwern near Newport is one of Corus’ two plants in the region, the other being in Port Talbot. Even the temporary reopening of the plant is not expected to see it achieve its full capacity of 3 million tonnes in production.

“The plant may be opened (next month) for a couple of weeks and closed again and opened again, based on demand,” said the source.

Though unions have welcomed this temporary reopening of the plant, they have sought a meeting with the plant managers to understand the long-term implication of this development.

Corus’ Teesside Cast Products plant in the North East too was threatened with a possible mothballing in May this year, when a four-member buyer group withdrew from a 10-year contract, halfway through.

However, this plant is expected to be kept running till at least September this year after some fresh orders were secured.

Though the mandatory 90-day consultation period with the union was completed in August, the plant has been kept operational.

Meanwhile, Corus is pursuing legal recourse to enforce the contract that was signed by a four-member consortium to buy nearly 80 per cent of this plant’s output till 2014.

The consortium of four buyers who withdrew from the 10-year buying contract are Marcegaglia of Italy, Dongkuk of South Korea, the Swiss-headquartered Duferco and Alvory of Uruguay.

The decision to stop buying steel from the Teesside plant was taken due to a fall in the global prices of steel.